The selloff in the Indian equity market continued with key indices seeing a cut of almost a percent each. The 50-share Nifty closed below 10,100 for the first time since December 2017, while the 30-share BSE Sensex closed 252.88 points at 32,923.12.

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Discussing the outlook and if the mutual fund industry is witnessing redemption pressures, Manish Sonthalia, Motilal Oswal, AMC said that one could see some more downside of around 4-5 percent on the headline numbers. "Everybody seems to be chasing momentum on the downside".

"The market has been consistently underperforming the global markets but there will come a point when it will not fall further because of revival in earnings", said Sonthalia.

The market expert said that there was a lot of negativity in the market possibly due to March syndrome, Bypoll results, raising of interest rates, etc. However, the risk of these was more to the largecaps than the smallcaps and midcaps.

He further added that the underlying truth in the market was earnings. "If they are underway then the story for the midcaps and smallcaps has not fully played out".

About specific sectors, he said that there was comfort in IT, Pharma, agri, cement as they are expected to do well over the next 2-3 years.

When asked about PSU banks, he said that the mess was getting deeper and deeper and one was not sure where it was going to end. "So, when the end is not in sight then there is no point in taking valuation call and therefore would give it a pass", he said.

First Published:Mar 19, 2018 11:28 AM IST